The personal blog of Peter Lee a.k.a. "China Hand"... Life is a comedy to those who think, a tragedy to those who feel, and an open book to those who read. You are welcome to contact China Matters at the address chinamatters --a-- prlee.org or follow me on twitter @chinahand.

Tuesday, March 18, 2014

[This piece was also posted at Asia Times Online on March 18, 2014. It can be reposted as long as China Matters is credited and a link provided.]

A certain amount of attention, and rightly so, has been paid to the
discomfiture of the People's Republic of China (PRC) with Crimea
unilaterally declaring independence from Ukraine. The PRC abstained on
the UN Security Council condemnation of the vote, instead of supporting
Russia with a "nay". The PRC possesses or covets several significant
territories whose inhabitants, if given the opportunity, might eagerly
defy the One China policy to announce, organize, and pass a referendum
of independence: Tibet, Xinjiang, Hong Kong, Inner Mongolia, Macau, and
Taiwan.

Certainly, the PRC would have preferred that Russia persisted in its
relatively principled and consistent opposition to the unilateral
declaration of independence by Kosovo (which the West engineered at the
expense of Serbian sovereignty and in order to get around footdragging
by Russia on the adoption of a Kosovo constitution that would have led to independence anyway in pretty short
order). Instead, Russian diplomats cited that instance of unilateral
Western high-handedness to excuse the shenanigans of Crimea's
parliament.

However, the PRC regime has more reason to worry about what happened in Kiev, not Sevastopol.

In Kiev, the United States took another bite out of the regime change
apple, openly abetting the overthrow of a democratically elected
president, the hapless and hopelessly corrupt Viktor Yanukovych.

Back on February 19, the Ukrainian government was slogging toward an
EU-brokered agreement with the opposition for a transitional government
and an early presidential election. I tweeted that it looked like the
US had overreached itself and had no Plan B to deal with the unwelcome
contingency of peace breaking out. I sarcastically opined that US
Beltway think tanks were already hard at work pitching studies on how
America could find a way to leap the troublesome gap in regime change
tactics from non-violent NGO subversion to direct violent overthrow a la Libya in the name of "responsibility to protect".

Well, it looks like the United States did have a Plan B, one that relied
on violent provocateurs to undermine the agreement and accelerate the
collapse of the government. The US government, in the person of
Victoria Nuland, the assistant secretary of state for Europe, apparently
laid the foundations for the coup by threatening Ukraine's oligarchs
with Western financial sanctions in case the demonstrations turned
violent - and the demonstrations did turn violent as extremists among
the demonstrators declared the EU-brokered truce "a ruse" and charged
police lines. The snipers did their bloody work, oligarch-backed
deputies bailed from Yanukovych's Party of Regions en masse, Yanukovych
fled, and the EU's transition agreement ended up in the trash together
with any Russian influence in the new regime.

The sinister possibility that the anti-Yanukovych forces did not
passively rely on a violent reaction by Ukraine's embattled security
forces is, of course, is implied by the intercepted phone call between
Estonia's Foreign Minister, Urmass Paets, and the EU's Catherine Ashton,
in which Paets passed on suspicion from the opposition that the
massacres carried out by snipers in Maidan were the work of a faction in
"the new coalition", not Yanukovych. A good indication of the
seriousness of these allegations is the unwillingness of Kiev, Western
governments and the Western press to investigate them beyond eliciting
some dodgy denials and reporting the rather dubious allegation by the
Ukraine government that the snipers were actually sent by Russia in
order to justify an invasion.

The extent that the United States has gone all-in on the current
Ukrainian government is also noteworthy. No attempt to put some space
between the United States and the new government, even for the sake of
tactical convenience in order to leave some geopolitical space for
playing "honest broker" with Russia. Instead it's We Are All
Ukrainians, accompanied by a rather flailing and dishonest attempt to
paper over the dubious legality of the new regime's accession to power
and, also, heroic efforts in the press to either minimize the healthy
fascist component of the new gang or blame the Russians for its
emergence.

The fact that the United States is also encouraging a similar campaign
against a legitimately elected but anti-American and vulnerable
government in Venezuela is another indication that the Ukraine coup
itself (if not the befuddled response to the subsequent Russian
pushback) was a matter of careful design, and not backed into by the
Obama administration in a fit of improvisation.

Another smoking gun, as it were, concerning Western tactics, was the
appearance at Maidan of Mikhael Khodorkovsky. Khodorkovsky had served
10 years in prison in Russia on politically motivated tax charges.
Putin, in a decision he might now be regretting, pardoned Khodorkovsky
on the eve of the Sochi Olympic Games in order to burnish Russia's soft
power image, in return from an undertaking by Khodorkovsky to abstain
from politics.

No dice, as Khodorkovsky, his person and personal wealth by now safely
ensconced in Switzerland, assured Kievans and a sizable crowd of Western
journalists that not all Russians supported the adventure in Crimea,
declared "Ukraine must become a European state" and drew a direct
parallel between the doomed reign of Yanukovych and Putin's
authoritarian ways.

It should be noted that Khodorkovsky probably owed his incarceration
both to his intention to challenge Putin politically 10 years ago and
his willingness to further his agenda by advancing US geopolitical
interests through the attempted sale of a 25% share of Yukos, at the
time Russia's largest oil empire, to a consortium of ExxonMobil and
Chevron Texaco. In 2003, I opined that Khodorkovsky's arrest thwarted
hopes of the Bush administration and neo-conservatives (both of whom
vociferously agitated for his release) that he would provide decisive
influence for the US both to Russian politics and in the strategic issue
of the export of Russia's energy surplus. Today, Khodorkovsky looks
and sounds like he is auditioning for the role of "good oligarch" who is
expected help guide (and fund) Russia to a better, de-Putinized,
pro-Western tomorrow. [1]

Given the stampede of the oligarchs in Ukraine anxious to protect their
Western wealth from sanctions by cooperating with the United States, it
is not too surprising that Putin promptly put the Russian
opposition/activist community on lockdown, to try to ensure that there
would be no Maidan Squares-ie no determined, NGO-funded,
Western-supported, Khodorkovsky-encouraged, increasingly
confrontational, goon-infiltrated opposition chipping away at the
patience of security forces, the legitimacy of the government, and the
resolve of key oligarchs while Western governments hooted from the
sidelines and threatened sanctions-in Moscow.

Same message received, I expect, in the People's Republic of China.

As part of the crackdown on social and political activism and free
expression that the PRC's Xi Jinping has instituted to help him navigate
through some treacherous economic waters, the PRC has shown itself
markedly hostile to local millionaires, particularly those who have a
big following on the Chinese microblogging platforms and display some
kind of independent political posture and social conscience.

With Ukraine and Venezuela apparently demonstrating the US determination
to exploit popular discontent, political opposition, and oligarch
anxiety to overthrow target regimes, it would not be surprising if the
PRC regime decides it has more pressing priorities than expanding
political participation, loosening the leash on opposition parties,
allowing increased freedom of expression, or assisting the journalists
of Western prestige media in their practice of adversarial soft power
reporting inside China.

The real Asian game, however, might not be inside the People's Republic
of China, where the regime still keeps a firm thumb on things. The
PRC's most apparent vulnerability to a Ukraine-style coup is on Taiwan.

Taiwan de jure independence is an existential threat to the PRC. That
is not because the PRC would "lose" the province of Taiwan which is de
facto independent and enmeshed in an intimate economic relationship with
the mainland.

It is because if Taiwan, a Han Chinese bastion, formally disassociated
itself from the PRC, and especially if/because independence was
understood to represent a repudiation of US and Western adherence to the
One China policy, PRC sovereignty would be fair game for the regime's
adversaries inside and outside of China, and ethnic regions such as
Tibet would be emboldened to demand independence themselves.

Today, the PRC leadership's attention is unhappily focused on Taiwan,
the dismal approval numbers of the mainland-friendly president, Ma
Ying-jeou, (18%) and the possibility that he will be replaced by someone
from the indigene-heavy independence-inclined Democratic People's Party
in the 2016 election.

As circumstances and polls permit, the DPP dabbles in calls for
independence-friendly initiatives as a matter of principle and in order
to fire up the base.

So far one DPP candidate, Chen Shui-bian, has been elected, and served
two terms from 2000 to 2008. (As part of Taiwan's democratic transition,
a native Taiwanese and ardent nationalist, Lee Tenghui, was made
president as chairman of the KMT in 1988. After leaving office in 2000,
he became a fixture in the independence movement). When Chen Shuibian
took office for his second term in 2004, he flirted with a referendum
constitutional reform (which would have inched Taiwan toward a more
lawyerly version of independence) until he was dissuaded by the US
government.

Actually, he was dissuaded by secretary of state Colin Powell, only
after Powell was able to gain the upper hand over that enthusiastic
pot-stirrer, creative destroyer, and regime-changer, vice president Dick
Cheney. Lawrence Wilkerson, a senior staffer with Powell, told the
story to Jeff Stein of Congress Quarterly:

"The Defense Department, with Feith, Cambone, Wolfowitz
[and] Rumsfeld, was dispatching a person to Taiwan every
week...essentially to tell Chen Shui-bian ... that independence was a
good thing."

Wilkerson said Powell would then dispatch his own envoy "right behind
that guy, every time they sent somebody, to disabuse the entire
Taiwanese national security apparatus of what they'd been told by the
Defense Department".

"This went on", he said of the pro-independence efforts, "until George
Bush weighed in and told Rumsfeld to cease and desist [and] told him
multiple times to re-establish military-to-military relations with
China".

Wilkerson's account was supported by Douglas Paal, former head of the
American Institute in Taiwan, the de facto US embassy in Taipei.

"In the early years of the Bush administration", Paal said
by e-mail last week, "there was a problem with mixed signals to Taiwan
from Washington. This was most notably captured in the statements and
actions of Therese Shaheen, the former AIT [American Institute in
Taiwan] chair, which ultimately led to her departure".

Sheehan was the previous head of AIT - and was married to Larry DeRita,
Rumsfeld's chief press flack at the Pentagon. She used her bully pulpit
to push for Taiwan independence and support the credibility of the DoD
approach until Colin Powell demanded her resignation and she was removed
in 2004.

So, chalk up US support for the One China doctrine as a "sometime
thing", to paraphrase George Gershwin. As the anecdote quoted above
demonstrates, US allegiance to the One China principle is, as most of
our undertakings with our geopolitical adversaries, conditional, laden
with formal and unspoken caveats, and ripe to be discarded once a
geopolitical opportunity is perceived.

Under current circumstances majority opinion in Taiwan does not favor de jure
independence (or, for that matter, unification); despite the dismal
personal poll numbers for Ma, the KMT's engagement-friendly and
independence-averse policy with the PRC is favored by a majority of
voters.

But judging by events in Kiev, the US appears to be increasingly
unwilling to respect democratically expressed preferences (or
ambivalence) when it sees an opportunity to roll up a geopolitical win
against an important adversary. Any window of opportunity for the
United States in the matter of the People's Republic of China may, in
fact, be fleeting.

In the United States, I detect a frustration that extends up to the Oval Office with the slipperiness of the PRC as a top-tier strategic
competitor. The PRC has become bigger and more threatening and harder
to lick; at the same time it has persisted with has its policy of
bobbing and weaving, avoiding direct conflict with the United States and
thereby denied the US. the opportunity to wield its unmatched military
power in order to put the PRC in its place and confirm America's place
at the top of the Asian hierarchy.

At some uncomfortably close date, the PRC will be strong enough and the
US protestations of resolve and capability will be suspect enough that
front-line states like Japan and the Philippines and Vietnam will seek
their own, independent mix of confrontation and accommodation with the
PRC while US leadership is increasingly honored "in the breech".

One of the awkward truths of US China policy is that it appears to be
increasingly driven by an anxiety that the PRC is becoming stronger and
more aggressive, and the United States is under a certain amount of
pressure to make a move to cut China down to size "before it's too
late".

If the United States-either the Obama administration or the even more
confrontational outfit that will take over if, as expected, Hillary
Clinton claims the presidency in 2016-wants to stick it to the PRC,
quickly and on the most favorable terms, and despite the PRC's
determination to avoid a direct contest with the United States-Beijing's
key point of vulnerability is Taiwan.

With the precedent of Ukraine, let's say that Ma Ying-jeou and the KMT
decide to insulate Taiwan-mainland relations from the possibility of a
KMT defeat in the 2016 polls and accelerate the development of
cross-strait ties. This shall not stand! Declare the hard-core
independence militants. Crowds appear before the presidential palace and
refuse to disperse until their demands-maybe for reduction of
cross-strait ties, maybe for a new unity government, maybe for a
referendum on independence-are met. In Chen Shuibian, currently about
halfway through a twenty-year sentence for corruption, there is even an
imprisoned leader whose release could be demanded. Things get violent
as the government, with its approvals hovering near single digits,
encounters angry defiance as it tries to put an end to the crisis.

Taiwanese yearning for democracy and freedom outside the baleful shadow
of communist China becomes a cause celebre. NGOs, politicians,
celebrities, journalists, and money from the West and Japan come in.
Japan, in particular, remembers its locally very popular history as the
colonial ruler of Taiwan from 1895 until 1945, and offers moral and
tangible support to the markedly pro-Japanese and anti-PRC elements in
the Democratic People's Party.

Recall that the President Lee Teng-hui, a fluent Japanese speaker from
colonial days, has retained close ties to Japan, Shintaro Ishihara, and
Japan's right wing; after he left office, Lee visited Japan and made a
pilgrimage to Yasukuni where his brother, who died in Japanese colonial
service, is enshrined. Recall also that the DPP as a whole has little
patience with PRC claims over the Senkakus; for that matter, Lee in fact
stated that they belong to Japan.

In February 2013, the chairman of the DPP (and presumptive 2016
presidential candidate Su Tseng-chang) roiled relations with the
mainland by visiting Japan to hail the Taiwan-Japan bilateral
partnership as members of a democratic alliance, which would make the
Asia-Pacific a region of security, stability and prosperity. Under
unfavorable scrutiny, Su was compelled to avoid a meeting with
nationalist firebrand and long-time friend of Taiwan Shintaro Ishihara,
but one can safely say that Japan is prepared to give the DPP a
favorable hearing if things turn ugly with the mainland. [2]

Back to our scenario. Somehow, as in Ukraine, the elected government is
delegitimized by some fatal combination of violence, disunity, and
ineptitude, driven from office, and replaced by a new coalition, which
declares undying loyalty to liberal democracy and implores diplomatic
recognition and military and economic support from the West and the
Asian democracies.

And it declares independence. And the United States and Japan, instead
of sticking with the pragmatic precedent of US-Taiwan-PRC relations,
honoring the One China policy and screwing over the Republic of China
once again, decide to seize this once in a lifetime opportunity to force
the PRC into a crisis on favorable terms…and they recognize the
independent Republic of China.

In the best case, PRC backs down and sees its clout and prestige
diminished. In the worst case…well, the United States is remarkably
cavalier about the consequences of its strategic gambits, especially
since the direct human costs are borne largely by America's unlucky
local adversaries and allies.

Far-fetched scenario?

Remarkably, J Michael Cole, a defense journalist in Taipei who used to
work at the Canadian Security Intelligence Service, has already played
with this idea in the National Journal.

He starts his scenario with a domestic political crisis, in what looks
like a conscious parallel between Yanukovych's attempt to tilt toward
Russia and Ma Ying-jeou's initiatives on cross-strait ties:

What is truly worrying when it comes to Taiwan is the fact
that these developments occur at a time of intensifying Chinese pressure
on Taipei, which is being compelled into signing various agreements
that risk being detrimental to Taiwan's ability to retain its sovereign
status.

Facing elevated opposition by legislators and civil society, the Ma
administration has hardened its line with increased reliance on law
enforcement to counter peaceful protesters and has frequently made a
travesty of public hearings and other mechanisms associated with liberal
democracies. This, in turn, has served to exacerbate frustrations
within the country, with possible repercussions for social stability.
.…
[G]rowing disillusionment with political institutions and heightened
fears that current trends could curtail their ability to determine their
destiny could eventually compel Taiwanese to take action which risks
destabilizing the government. Recent incidents, such as the crashing of a
thirty-five-tonne truck into the Presidential Office by a disgruntled
former Air Force officer, are a sign that things are coming to a boil,
with escalation all the more likely between now and 2016, when the next
presidential elections are scheduled.

Should Taiwanese decide that their country's democracy is no longer
sufficient to protect their interests and adopt nonpeaceful means to
resolve the matter, the resulting instability would provide Chinese with
justification to intervene militarily. [3]

Cole echoes the "snipers enabled Russian invasion" interpretation of the
chaos in Ukraine, and takes the tack that the PRC would encourage
violent subversion, perhaps through a pro-mainland gangster, Chang
An-le, in order to give it an excuse to invade while Democracy, Freedom,
and the Seventh Fleet stand cravenly to one side. My personal feeling
re Chang is that Beijing is sponsoring a pro-unification goon squad so
anti-independence politicians can draw on a reserve of street muscle to
provide a riposte to the more radical independence activists, who rely
on street protests and stunts like pulling down a statue of Sun Yat-sen
in Tainan City for political traction.

It is possible that the PRC, faced with the prospect of the DPP winning
the presidency in 2016, might take the momentous step of fomenting
political chaos in Taiwan, assume US fecklessness, and invade. But I
should say that the PRC, based on its previous experience with the Chen
Shuibian regime, is more likely to believe it can manage the awkwardness
with a DPP regime through the usual mix of threats and inducements-if
it believes that the US will uphold the One China policy.

In contrast to Cole's opinion (and more in keeping, I might say, with
the drift of his scenario and the propensity for mischief displayed by
China hawks in the US), I think a more likely scenario for violent
political unrest in Taiwan is that pro-independence forces, if egged on
by the United States and Japan with the promise of recognition, might
foment a political crisis in Taiwan, overwhelm the current government,
declare independence, and dare the PRC to respond. That's pretty much
what happened in Ukraine.

A Taiwan declaration of independence backed by Japan and the United
States would force an existential choice on the PRC: does it swallow the
humiliation of backing down on Taiwan, revealing itself to be a paper
tiger in front of its Asian interlocutors? Or does it make good on its
bluster and launch an attack to subjugate Taiwan?

Time will tell.

But it doesn't matter who you think the bad guy would be; whether you
think the PRC would take the enormous geopolitical risk of fomenting
chaos in Taiwan in order to justify an invasion, or if you think the
United States would roll the dice on its future in Asia by egging on
pro-independence radicals in Taipei, or you simply hope that nobody
starts World War III during your lifetime…

Saturday, March 15, 2014

At US behest, Austria arrested a Ukrainian oligarch named Dmytro
Firtash in Vienna on some corruption and bribery charge that appears to be
involved tangentially with the United States.

Apparently, Firtash was small fry, 14th on the
Ukraine list, worth only $673 million.Being an oligarch is, in itself, no crime in Ukraine.Yulia Tymoshenko is an oligarch (the “Gas
Queen); the new Ukrainian government openly appointed oligarchs Igor Kolomoisky
and Serhiy Taruta as governors in two western provinces in order to keep a lid
on pro-Russian sentiment; and the great white hope of the Maidan activists, the
“good oligarch” Petro Poroshenko, a.k.a. “The Chocolate King” is the
seventh-richest man in Ukraine, worth about $1 billion.

Firtash’s problem is that the US identified him with the
Yanukovych camp and close to Russia because of his gas dealings.It also looks like Firtash moved into
Tymoshenko’s gas interests while she was in prison, which may account for the
FBI obligingly dropping the hammer on him.

More importantly, I expect, Firtash’s arrest is meant to
send a message to another oligarch-heavy area, Russia, in anticipation of
Western sanctions for the Crimea referendum.

And, I think, the message is “Work with the US and against
Putin if you want your Western assets to be protected and respected.”

This message is likely to be heeded.After all, most oligarchs are laser focused
on their personal wealth and their personal interest.In an era of globalized finance, the dependence
of the wealthy on the nation states that spawned their biological integument is
less important than the matrix of trans-national institutions that sustain
their finances and cater to their need for personal impunity.Personal profit, in other words means more
than patriotism or even national prosperity.

This state of affairs is magnificently illustrated by the
story of a magnificent yacht currently docked in New York, courtesy ofthe town herald of the globalized wealthy,
CNBC:

New Yorkers have been tweeting, instagraming and
posting countless photos of a gleaming blue megayacht docked off midtown
Manhattan. It's called "Serene." At a staggering 436-feet, with five
levels, several swimming pools, two helicopter pads and soaring chrome exhaust
pipes at the top, it nearly outshines the Intrepid Museum next door. (Its best
amenities are inside: the "underwater viewing room," an indoor
climbing wall, children's playroom and cabins for 24 guests and 52 crew,
according to the yacht builder.) Anyone doing a quick Google search learns that
the owner of Serene is Yuri Scheffler, the vodka-and-spirits magnate behind the
Stolichnaya brand. And with the turmoil in Ukraine
and Russia
, many have also speculated that Serene's sudden presence is a sign of the
worried oligarchs-the Putin-connected, Russian super rich who now face a
financial backlash from the West for Russia's actions. But they would be wrong.
Scheffler is no Putin oligarch. And he has a surprising perspective on Ukraine.

In an email interview, Scheffler said he is in New
York on business-hence the boat.

Although Scheffler's company, SPI Group, started in
Russia, it's now based in Luxembourg. Scheffler is now a British citizen who
spends much of his time abroad and hasn't been to Russia in 12 years. Scheffler
has publicly battled President Vladimir
Putin for years as the Russian government tried to seize the company and
"renationalize" its assets. The government even issued a warrant for
Scheffler's arrest in 2003 after he refused to hand over the company. So when
asked about his views on Ukraine, Scheffler was highly critical of Russia's
government.

One might think that, the feelings of a British citizen with a Luxembourg
company about Russia might not be newsworthy, even if he is a rich fuck who owns
a yacht longer than a football field.

Well, you’re wrong.Oligarchs are not
only rich guys and gals.They also invest
in media and politics to give their interests the greatest possible
weight.So they can bring down
governments.

One of the most interesting takeaways of the Ukraine crisis was the report
that Victoria Nuland had threatened sanctions against the Western interests of
key Ukrainian oligarchs if violence was used against protesters…which erupted
with suspicious alacrity.Since the
various oligarchs controlled dozens of deputies in the Ukrainian parliament,
Yanukovych’s Party of Regions imploded and the rest is regime change history.

It is safe to say that the US has a similar strategy to pressure Russia’s 19
billionaires, first indirectly through sanctions against Russia and then, if
British squeamishness over attacking one of the props of London’s prosperity
are overcome, against the oligarchs’ personal wealth.

We even have a “good” oligarch, Mikhael Khodorkosky, the oil tycoon who was
imprisoned by Putin ten years ago on the well-founded suspicion that he was
ready and willing to serve as the vehicle for American interests and mischief
in Russian politics and the strategic Russian oil industry.

Khodorkovsky, although he had promised to
eschew politics in return for a pre-Sochi Olympics pardon, emerged in Maidan
Square recently with an impassioned attack on the Russian adventure in Crimea,
and on Putin personally.Khodorkovsky,
prior to his imprisonment, had spent lavishly on think tank funding and PR in
the West and he apparently still has his soft power mojo; his remarks were
recorded and broadcast to the world by a small army of prestige media scribes.

Apparently the Forbes list of the world’s richest people had 424
billionaires on it with $1.1 trillion worth of wealth ($2.5 billion per capita
and about 3% of global world product) in 1996;now it’s 1,565 billionaires with $6.5
trillion ($4 billion per capita and around 10% of the global nut).In case you’re wondering, the growth in
billionaires and their wealth is outrunning inflation (about 50% since 1996), real
GWP (about 40%), and my 401K (don’t ask). All I can say is,
“Waiter!I’ll have what they’re having!”

I suppose it’s good that the United States is keeping up with global
economic trends and has a strategy to exploit the proliferation of oligarchs
who view national governments as just another item in their portfolios of
assets and interests, to be rebalanced as pressure from the United States
indicates.

Even though the PRC has largely maintained the Communist Party’s political
and media monopoly, China has an oligarch problem, too, and has been aggressive
in making sure that rich people with reformist inclinations and large
followings on social media are cut down to size.The PRC also cares about rich people who have
evaded capital controls and stashed their ill-gotten gains in the West, making
them vulnerable to US and EU extortion.The PRC has to tread carefully in its anti-corruption drive, since the
threat of local prosecution will drive the rich to put more of their money
overseas and out of the Party’s reach and within range of US sanctions.I expect some thought is being given to
identifying and cultivating a safe overseas haven for cash and investments, to
deal with the headache that the West is still the most attractive destination
for investment, liquidity, and the free movement of capital.

In passing, I might note that for lefty liberals it is one of those
inconvenient truths that the countries that occasionally attempt to subordinate
the interests of the wealthy to those of the state (and possibly to the occasional benefit
of the huddled masses of the 99%) are often, by a funny coincidence, America’s
most detested enemies, i.e. Russia, China, Cuba, and Venezuela.

The United States also has an oligarch problem.Rich guy Michael Bloomberg ran New York for
several years.We’ve got the Koch
brothers lavishly funding political candidates at the state and national level,
and turning Wisconsin into a petri dish for their economic agenda.A California billionaire, Tim Draper, is
engaging in the oligarch version of nation building, funding a ballot
initiative to split California into six states.And of course Tom Perkins came straight out and said it: it should be
one dollar not one person one vote.I
suppose we should be grateful that some oligarchs are still interested in
restructuring the balky United States operation instead of just “going Galt”
and abandoning it outright.

Maybe you haven’t noticed the oligarch problem because the rather dubious
decision has been made to shield the identities of the malefactors of great
wealth behind the anonymizing “1%” tag, allowing their defenders to deploy the
“class warfare” trope and talk about economic growth and tweaks to the minimum
wage as a solution for the “income inequality” crisis.

I doubt that giving burger flippers an extra two dollars an hour will
restore prosperity and dignity to the working poor.But there is no mainstream constituency for
redistributing oligarch wealth to solve our problems, on the valid basis that
any attempt to mess with the oligarchs will simply send them and their billions
scampering to a more amenable jurisdiction.

When Bill Clinton went whole hog on globalization, we pretty much let the
oligarch cat out of the bag.Now the
national government of the United States has committed to globalization with
the idea that the America’s globalization-related problems of employment and
investment can be solved…with more globalization, a rather dubious assertion
that resembles the voodoo-economics mantra of Republican conservatives that the
problems encountered in cutting taxes will be solved by…cutting more taxes.

So we have a solution for manipulating and exploiting
oligarchs overseas.Too bad we don’t
have one for oligarchs at home.Welcome
to the 21st century.

Monday, March 10, 2014

Pepe Escobar put me onto these pictures, both taken a few weeks before
the new ruling troika’s accession to power in late February. Victoria Nuland in the first, Baroness Ashton in the other.Pretty clear from these formal portraits that
a formal anointment by the US and the West was underway.The three are Yarsenyi Yatsenyuk, Vitali Klitschko, and
Oleh Tyahnybok.

Tyahnybok, the one least familiar to Western readers—and for
very good reason, as shall be seen-- is the leader of the Svoboda Party and a
real piece of work, according to his Wikipedia entry:

On July 20, 2004, Tyahnybok was expelled
from the Our Ukraine parliamentary faction[9][12]
after he made a speech in the Carpathian Mountains at the gravesite of a
commander of the Ukrainian Insurgent Army.[12]
In the speech, which was aired on television in the summer of 2004, he made
comments like:[13]

"They were not afraid and we
should not be afraid. They took their automatic guns on their necks and went
into the woods, and fought against the Moskali, Germans, Kikes and other scum
who wanted to take away our Ukrainian state."[11]

In his defence Tyahnybok said he had
not offended Russians
by calling them an occupying force as this was based on historical fact. He
also denied that he was anti-Semitic, saying he was rather pro-Ukrainian.[14][15]
The head of the State Committee of National Migration (Derzhkomnatsmihratsia) Hennadiy
Moskal published an open letter with insulting content towards the head of
the AU Freedom. The Prosecutor's office filed criminal charges of inciting
ethnic hatred, but later closed the case for lack of offense. Since that time
Mr. Tyahnybok has won nine court cases in that regard. By the decisions of
courts it was recognized that the criminal case was raised unlawfully, and the
actions of TV-channel "Inter" that showed the footage of the
Tyanybok's speech as well as the Head of the Derzhkomnatsmihratsia H. Moskal
were recognized as ones that insult the honor and dignity Oleh Tyahnybok and
caused him a moral damage. The actions around that issue led to creation of the
"Program in defense of Ukrainians". Tyahnybok stated in 2012
"this speech is relevant even today" and "All I said then, I can
also repeat now".[4]

Here's a picture of Tyahnybok doing what looks like national socialist, excuse me, social-national calisthenics:

Thanks, Wikipedia.I
guess Khodorkovsky neglected to read Wikipedia before he declared there were no
fascists or Nazis in Maidan.

As to why Victoria Nuland and Catherine Ashton cherish
Tyahnybok, or at least hold their noses, ignore his blatant anti-Semitism,
Ukraine ethnic chauvinism, and flirtations with fascism, the explanation can be
found within the final passage in his Wikipedia entry:

In an opinion poll conducted on December 7–17, 2013,
respondents showed that in a hypothetical presidential election between Viktor
Yanukovych and Tyahnybok, results found that Tyahnybok would win with 28.8%
of the popular vote, versus Yanukovych's 27.1%.[31]
Another poll taken on January 42–February 2, 2014 across all regions of Ukraine
showed that in a presidential race between Tyahnybok and incumbent Yanukovych,
54.% of the population would vote for Tyahnybok.[32]

In other words, with pro-Russian candidates off the ballot,
Tyahnybok is a dominant political power in Ukraine.He certainly is a bigger votegetter than
Yatsenyuk, whose main responsibility is to negotiate with the West over
financial aid and the EU package, and Vitali Klitschko, who is seen as a political
tyro. In recognition of Tyahnbyok's clout, Svoboda members got the posts of Deputy Prime Minister, Minister of Agriculture, Minister of Ecology, and a acting prosecutor general. A founder of the Social Nationalist party was made secretary of the Ukraine National Security and Defense Council.

Looks like Ukraine might be in for a prolonged session of Strategic Patience (TM), my shorthand for the US persisting with spectacularly flawed policies because 1) the pain and cost is mostly borne overseas 2) the United States can step in and claim credit for confronting the problems itself created, but without ever addressing or removing the underlying causes and 3) there is always the hope that things will get so bad that everybody will just give up and America will get its way.